Valley inns see upside of recession

Many big-city hotels and motels that thrived on business travel and conventions while the economy boomed now are struggling with double-digit declines in room revenue.

Greg Stiles

Sometimes it's best to be an out-of-the-way destination.

Many big-city hotels and motels that thrived on business travel and conventions while the economy boomed now are struggling with double-digit declines in room revenue. Southern Oregon inns — where conventions and business meetings are fewer — have managed to hold their own during the downturn, however.

A May report from the Oregon Lodging Association indicates Medford and Grants Pass establishments have fared comparatively well. Room revenue at local lodgings declined 3.5 percent from May 2008, while other parts of Oregon saw declines of 20 percent. Occupancy declined 3 percent locally, while the Portland area suffered a 15.2 percent drop.

Motels, hotels, recreational-vehicle parks and other establishment that collect the state's 1 percent travel tax are included in the report.

For the year to date, Southern Oregon has seen a 6.5 percent occupancy decline, while hotels in the Portland area have slumped 14.2 percent. Local room revenue fell 5.7 percent, while Portland-area room revenue fell 16.6 percent.

"The groups that relied on business travel, meetings and conventions have really been hurt in this downturn," said consultant Mark Dennett. "That's why the Portland drop is more dramatic than Eugene or Central Oregon. Southern Oregon has never really had that strong of a base (of business travel). Yes, we get some meeting business, but those are people driving here. We don't have people fly in for major conferences like you see in Los Angeles, Seattle or Portland."

On the other hand, Southern Oregon is a beneficiary of the economic turmoil, because dollars usually spent thousands of miles away are being spent here, he said.

"During a recessionary period, people are reluctant to make long-range plans," Dennett said. "If you are going to Hawaii, Mexico or Europe, you're going to make those plans two months ahead. If you are concerned about your job or spouse's job, you're going to delay those decisions. When summer arrives, you say it would be great taking a vacation, but you're looking at vacations much closer to home."

While former globe-trotting vacationers may discover Southern Oregon for the first time this year, bread-and-butter Northern California tourists have continued to find their way here.

"Southern Oregon has always been a reasonably priced vacation and vacation value," said Carolyn Hill, Southern Oregon Visitors Association chief executive officer. "People may not be doing what they were doing at Walt Disney World or Mexico, but we have a place with a lot of great experiences and lodging options. In tough economic times it's about doing what makes sense. We have continued to focus on what we know. The truth is, there is a tremendous affluent population in the San Francisco Bay Area, and that's a drive market for us."

Dennett said the growth of championship-quality golf courses, the local wine industry and expanding culinary opportunities have made it easier to sell the region.

"The quality of our tourism program has improved dramatically over the past five years, and we're very affordable," Dennett said. "When you're making a last-minute decision and want the most bang for the buck, Southern Oregon really offers hotel rooms that aren't going to cost $200 or $300 a night. I think that's why we've been holding on."